France has credit of little less than nine milliard francs, of which 875 millions is from Italy, four milliards from Russia, 2,250 millions from Belgium, 500 millions from the Jugo-Slavs, and 1,250 millions from other Allies.  Italy has only small credits of no account.

Now this situation, by reason of which the victorious countries of Europe are heavy debtors (France has a foreign debt of nearly 30 milliards, and Italy a debt of more than 20 milliards) in comparison with Germany, which came out of the War without any debt, has created a certain amount of bad feeling.  Germany would have got on her feet again quicker than the victors if she had no indemnity to pay and had no foreign debts to settle.

France’s anxieties in this matter are perfectly legitimate and must be most seriously considered without, however, producing the enormities of the Treaty of Versailles.

Assuming this, the situation may be stated in the following terms: 

1.  All the illusions as to the capacity of Germany being able to pay have fallen to pieces, and the indemnities, after the absurd demands which tended to consider as inadequate the figure of 350 milliards and an annual payment of from ten to fifteen milliards have become an anxious unknown quantity, as troublesome to the victors as to the vanquished.  The German circulation has lost all control under the force of internal needs, and Germany is threatened with failure.  The other debtors—­Austria-Hungary, Turkey, Bulgaria—­have need of succour, and can pay nothing.  Austria has need of the most indispensable objects of existence, and everything is lacking.

2.  The indemnity which Germany can pay annually in her present condition cannot, calculating goods and cash payments altogether, represent more than two or three milliards at the most.

3.  The victorious countries, such as France, have won immense territories and great benefits, yet they have not been able to pay the War debts contracted abroad, and not even the interests.  France and Italy, being countries of good faith, have demonstrated that, if they cannot pay, it is absurd to demand the payment of much higher sums from countries like Germany, which has lost almost all her best resources:  mercantile fleet, colonies and foreign organization, etc.

4.  The danger exists that with the aggravation of the situation in the vanquished countries and the weakening of the economic structure of Europe, the vanquished countries will drag the victors down with them to ruin, while the Anglo-Saxon peoples, standing apart from Continental Europe, will detach themselves more and more from its policy.

5.  The situation which has come about is a reason for everyone to be anxious, and threatens both the downfall of the vanquished and the almost inevitable ruin of the victors, unless a way is found of reconstructing the moral unity of Europe and the solidarity of economic life.